The Bond Dream Room

[dualstow]

From the Financial Times, last week, print version:

It was a crisp September day in 2015 when Timothy Young arrived at Houten, an unremarkable Dutch commuter town, determined to col- lect an almost 400-year-old debt. He carried a case containing a fragile piece of goatskin covered in dense writ- ing and numbers. It was a bond, issued in 1648 by a group of Dutch landowners who managed the dikes on a stretch of the river Lek. They had borrowed 1,000 guilders from a local merchant and the bond stated that in return for the loan, the merchant would receive a 5 per cent interest payment every year-for ever.

Although the terms of this so-called "perpetual" bond have changed over centuries of wars, depressions, revolu- tions and new currencies, it is still a valid liability of Stichtse Rijnlanden, a Dutch utility, and is now owned by Yale University's Beinecke Library. Young, a curator at Yale, was collecting €136 of interest from a delighted Dutch official, who had made a giant cheque to commemorate the payment.

…

[Smith1776]

From the Financial Times, last week, print version:

It was a crisp September day in 2015 when Timothy Young arrived at Houten, an unremarkable Dutch commuter town, determined to col- lect an almost 400-year-old debt. He carried a case containing a fragile piece of goatskin covered in dense writ- ing and numbers. It was a bond, issued in 1648 by a group of Dutch landowners who managed the dikes on a stretch of the river Lek. They had borrowed 1,000 guilders from a local merchant and the bond stated that in return for the loan, the merchant would receive a 5 per cent interest payment every year-for ever.

Although the terms of this so-called "perpetual" bond have changed over centuries of wars, depressions, revolu- tions and new currencies, it is still a valid liability of Stichtse Rijnlanden, a Dutch utility, and is now owned by Yale University's Beinecke Library. Young, a curator at Yale, was collecting €136 of interest from a delighted Dutch official, who had made a giant cheque to commemorate the payment.

…

Dang. Cool.

[Xan]

From the Financial Times, last week, print version:

It was a crisp September day in 2015 when Timothy Young arrived at Houten, an unremarkable Dutch commuter town, determined to col- lect an almost 400-year-old debt. He carried a case containing a fragile piece of goatskin covered in dense writ- ing and numbers. It was a bond, issued in 1648 by a group of Dutch landowners who managed the dikes on a stretch of the river Lek. They had borrowed 1,000 guilders from a local merchant and the bond stated that in return for the loan, the merchant would receive a 5 per cent interest payment every year-for ever.

Although the terms of this so-called "perpetual" bond have changed over centuries of wars, depressions, revolu- tions and new currencies, it is still a valid liability of Stichtse Rijnlanden, a Dutch utility, and is now owned by Yale University's Beinecke Library. Young, a curator at Yale, was collecting €136 of interest from a delighted Dutch official, who had made a giant cheque to commemorate the payment.

…

Dang. Cool.

Very cool. But... he went all the way to the Netherlands for a €136 payment?

[Smith1776]

Very cool. But... he went all the way to the Netherlands for a €136 payment?

Hopefully he got a nice vacation out of it!

[dualstow]

Very cool. But... he went all the way to the Netherlands for a €136 payment?

Good point. Doesn’t even cover the flight!
Yeah. What Smith said.

[dualstow]

Bond yields going up (so prices down).
According to one letter I read, it's strong economic growth, a heavy demand for mortgages and a surge in oil prices.

[Dieter]

Bond yields going up (so prices down).
According to one letter I read, it's strong economic growth, a heavy demand for mortgages and a surge in oil prices.

Can only say "ouch"

[ochotona]

Huh? What surge in oil prices? $71.27 right now.

If oil falls below $60 they start shutting-in wells, because some of them stop creating positive cashflow.

Maybe your State adds lots of taxes on top of your gasoline prices. Here in Houston gasoline is $2.50. That's $0.39 in fifty-years-ago Dollars.

[yankees60]

Huh? What surge in oil prices? $71.27 right now.

If oil falls below $60 they start shutting-in wells, because some of them stop creating positive cashflow.

Maybe your State adds lots of taxes on top of your gasoline prices. Here in Houston gasoline is $2.50. That's $0.39 in fifty-years-ago Dollars.

I do remember paying $0.15 per gallon in the late 60s. It was a huge deal in 1979 when gas first hit $1.00. Did not stay at that level for long.

[welderwannabe]

Bond yields going up (so prices down).
According to one letter I read, it's strong economic growth, a heavy demand for mortgages and a surge in oil prices.

Or its is inflation expectations. Since the fed cut 50bp the 30 year has gone up 50bp.
That lines up with the increase in gold, which tends to go down when interest rates go up. However not this time.

Fed cut too much too soon based on the data, should have started with a 25bp and monitored. Instead a bold move to possibly try to help out with the election.

Long term debt market has been soft for sometime, no one wants it with our fiscal situation. There is a reason why the US Treasury has been issuing mostly short term debt, even with an inverted yield curve which meant it cost them more. They know the market won't absorb a lot of long term debt, not only because of our national debt and increasing deficits as far as the eye can see, but countries are reducing holding of US Treasurys as their reserves since we scared them all with how we treated russia after the Ukraine invasion. Stealing their dollar denominated reserves and kicking them out of SWIFT set a very bad precedent that made other countries nervous.

Anyways, went down a serious rabbit whole there sorry.

I've read the same excuses as you, while a heavy demand for mortgages and oil prices are possible excuses, I don't believe them. The oil issues are caused by instability in the middle east, which usually causes some level of flocking to Treasurys as a safe haven, which we aren't seeing.

Strong economic growth, to the extent it creates inflation concerns with the fed cutting, is much more plausible, but I think the real reason is the US is rapidly running out of rope with their ability to issue endless debt. Fewer and Fewer people want our long term debt as our health over the 30 year term of a TBond is questionable. We're either gonna default, or inflate it away. Neither option is good for holders of long term nominal Treasurys.

[boglerdude]

They both print like crazy, why is china 2% 10-year rate and russia 16% 10-year?

[barrett]

They both print like crazy, why is china 2% 10-year rate and russia 16% 10-year?

I have no idea on Russia but I believe that China has been in a deflationary spiral since they locked everything down after the 2022 Winter Olympics and kept everyone essentially shut inside their homes for 9-10 months. Unemployment, especially youth unemployment, is incredibly high there. Property values (where the Chinese tend to hold a lot of their wealth) have gotten crushed. A lot of manufacturing has moved to other countries. Plus, I would guess that Chinese investors don't necessarily trust that they will be paid back in full if they lend to the government. I have no idea on the overall numbers but workers are leaving China when they can. Some have gone to South Korea & Japan, some are coming to the US, etc. It's probably a tiny percentage of the overall population but a bad trend.

Wife is Chinese and gets a lot of her information from overseas Chinese many of which I believe are from Taiwan. So the information could be quite biased but seems to be true for the most part from speaking to a few people who we know who have gone back to the mainland visit.

[dualstow]

Is she reading wenxuecity?

[barrett]

Is she reading wenxuecity?

No, not reading wenxuecity. Just listening to commentators online but, as I mentioned, we have also gotten some info from recent visitors to the mainland that corroborates what she has been hearing online.

BTW, do you recommend wenxuecity as a reliable source?

[dualstow]

My Chinese is too poor to say one way or the other.
I just know that my wife reads it all the time and whenever I mention some news, she already knows about it.
I’ve only used it to practice reading headlines and pick up some vocabulary.

[dualstow]

Buggy whips EDV up 1.4% this afternoon

[mathjak107]

TMF the leveraged version is up 3.4%

my tyd leveraged version is up 2% in the carolina reaper

i also own govz in the O.P.T.R.A. PORTFOLIO UP 1.64%

but these all function in leveraged risk parity portfolios with managed futures as well riding shotgun so if one doesn’t work the other should

[boglerdude]

With retail using leverage and everyone insuring everyone else's portfolio we'll get another AIG type bust n'bailout. wont have much time to buy the dip tho